Drop in NPR, poor Tamil Nadu offtake hit India Cements Q3 profit
Hit hard by a sharp decline in net plant realisation (NPR) as well limited consumption in southern region (the main market), India Cements reported a 57% fall in its net profit for the quarter ended December 31, to Rs 15.24 crore, compared with Rs 35.34 crore in the same quarter last fiscal.
Sequentially or in Q2, the net profit was at Rs 23.67 crore. Cement price, which was stable during the first quarter of the fiscal, was subject to aberrations, resulting in top line erosion of more than Rs 250 a tonne sequentially, which sharply impacted the bottom line in Q3.
The net plant realisation came down by 6% during the quarter under review over the previous quarter (Q2). As a result, revenue during the quarter dropped to Rs 1,213.08 crore, compared with Rs 1,268.26 crore in Q2 and Rs 1,267.85 in the year-ago period.
The Q3 figures are not comparable with that of the previous fiscal due to merger of its subsidiaries Trinetra Cement and Trishul Concrete Products with itself.
“To offset the poor offtake in the southern markets, particularly in the pricey market of Tamil Nadu, the company had to sell more volume in the highly price-competitive markets of Maharashtra, Uttar Pardesh and central India which hit the margins sharply,” said N Srinivasan, vice-chairman and managing director.
Addressing a press conference on Friday, he said: “We have lost 15% sale in our main market of Tamil Nadu due to lack of sand availability which came as a big stress on us. While the demand in Andhra Pradesh and Telangana are getting better, we had to undergo challenges both in Tamil Nadu and Kerala owing to lack of demand due to various reasons. These impacted our margins.”
Source: FINANCIAL EXPRESS